Item 1. Business

Overview

NetApp, Inc. (NetApp, we, or us) is a global cloud-led, data-centric software company, building on a rich history of software innovation. We bring enterprise-grade data services to the leading clouds, and the simple flexibility of cloud into the data center. We help organizations run large and demanding workloads on the public cloud and in hybrid cloud environments with industry-leading solutions that work across diverse environments and the leading public clouds. We empower organizations to lead with data in the age of accelerated digital transformation. We were incorporated in 1992 and are headquartered in San Jose, California. In a world where technology is pervasive and changing expectations, digital transformation tops the strategic agenda in most organizations. To successfully transform, data must become the lifeblood of an organization, accelerating efforts to create new customer experiences and seize opportunities for innovation, while at the same time, optimizing operations for cost, scale, speed, and agility. Digital transformations are driving IT organizations to future-proof on-premises investments for a cloud-next world, move enterprise workloads to the cloud, and continually pursue the promise of cloud-native innovation. Meeting these requirements means transforming IT to take control and thrive in a multi-cloud world. This puts IT leaders under pressure to harness today’s wealth of data and leverage technology to create value across the entire organization.

Our strategy is to apply our rich data-centric software innovation to enable customers to thrive in a hybrid cloud world and build data fabrics to accelerate data-driven digital transformations. A data fabric simplifies the integration and orchestration of data services across clouds and on-premises to accelerate digital transformation. We help organizations to get the most out of their cloud experience – whether public, private or hybrid – by enabling IT to discover, integrate, automate, optimize, protect, and secure data and applications. NetApp delivers the full range of capabilities organizations need for their data fabrics, enabling the business to deliver the data and applications to the right place at the right time with the right capabilities to fuel innovation.

Product, Solutions and Services Portfolio

NetApp provides software, systems and cloud services that allow organizations to run their applications from the data center to the cloud, whether they are developing in the cloud, moving to the cloud, or creating their own cloudlike experiences on-premises.

Public Cloud Services

NetApp's public cloud services (formerly referred to as “Cloud Data Services”) are delivered as cloud-based software and as Software-as-a-Service (SaaS). Our portfolio of enterprise-class solutions and services enables customers to fully control and manage storage systems in the cloud, consume high-performance storage services for primary workloads, and optimize cloud environments for cost and efficiency. These solutions and services are generally available on the leading public clouds, including Microsoft Azure, Google Cloud Platform and Amazon Web Services (AWS).

The public cloud services portfolio can be categorized into four solution areas:

	•	Cloud Storage – Software and services available for the management of storage in the public clouds.

	•	Cloud Controls – A centralized control plane to automate, monitor, orchestrate, manage, and optimize applications, services, and data in the cloud and hybrid-cloud environments.

	•	Cloud Services and Analytics – SaaS services that help protect, leverage, and optimize customer investments in the cloud.

	•	Cloud Optimization – Services that automate and continuously optimize cloud compute infrastructure, helping companies reduce their compute costs while ensuring scalability and availability, as well as offerings that provide managed virtual desktop services.

Cloud Storage

NetApp Cloud Volumes delivers cloud storage as customer-managed software or as a fully managed service, enabling customers to choose whether to fully control and manage their own storage systems in the cloud or simply select their performance levels, service level agreements (SLAs), and service level objectives (SLOs).

Customers benefit from the ability to migrate data to the cloud securely and efficiently with built-in data transport features and services for existing NetApp or third-party storage and can choose where to deploy primary workloads without having to re-architect the applications or databases. These cloud storage offerings are available on the major cloud providers, including Microsoft (Azure NetApp Files), Google (Cloud Volumes Service for Google Cloud), and Amazon (Cloud Volumes Service for AWS). For those customers who wish to manage their own cloud storage implementation, we offer Cloud Volumes ONTAP, a cloud-based data management service built on NetApp ONTAP storage software.

Cloud Controls

NetApp Cloud Manager provides IT experts and cloud architects with a centralized control plane to manage, monitor, and automate data in hybrid-cloud environments, delivering an integrated experience of NetApp's Cloud Solutions and Services.

NetApp Virtual Desktop Service (VDS) enables organizations to deploy, manage, and optimize virtual desktop environments through a SaaS-delivered global control plane for virtual desktop management that functions as an extension of their cloud environment.

Cloud Services and Analytics

NetApp Cloud Insights is an infrastructure monitoring tool that gives organizations visibility into their entire infrastructure with the ability to monitor, troubleshoot, and optimize cost across all resources, including public clouds and private data centers.

NetApp Cloud Sync delivers simple, rapid, and continuous data migration and synchronization service for file systems with any cloud or on-premises target.

NetApp Cloud Compliance, driven by artificial intelligence algorithms with automated controls for data privacy regulations such as the General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA), and more, enables organizations to get their business application data, on-premises data, and cloud environments privacy-ready.

NetApp Cloud Tiering service allows customers to retain on-premises, high-performance All-Flash FAS (AFF) and FAS Solid-State Disk (SSD) storage and combine it with the benefits of cloud economics. By leveraging the low costs of Azure Blob and Amazon S3 object storage for cold data, organizations can optimize their investments.

NetApp SaaS Backup service is a secure, encrypted cloud-native offering that safeguards business-critical Microsoft Office 365 data from corruption, malicious or accidental deletion via a backup and restore offering.

NetApp Cloud Backup delivers seamless and cost-effective backup and restore capabilities for protecting and archiving cloud and on-premises ONTAP data.

NetApp Global File Cache is a software-based solution that delivers fast and secure access to data for users by caching active data sets to distributed offices globally.

Cloud Optimization

Spot by NetApp offers a portfolio of compute and storage services that monitor and analyze applications' needs and automatically optimize cloud resources to meet those needs. These cloud operations services help drive cloud resource optimization in real-time for both compute and storage, offering significant operational savings while maintaining SLAs and SLOs.

Spot Cloud Analyzer by NetApp is a cloud management and optimization dashboard. It provides a gateway to other tools that optimize cloud spending, including tracking and monitoring of cloud expenses, identifying waste and potential optimization points, and providing executable action items.

Spot Eco by NetApp automates reserved instance lifecycle management. By providing comprehensive lifecycle management, Eco is a flexible reserved capacity management service that allows users to plan, buy, and sell reserved instances.

Spot Ocean by NetApp provides automation for cloud infrastructure containers. It continuously analyzes how containers are using infrastructure and automatically scales compute resources to maximize utilization and availability.

Spot Wave by NetApp allows organizations to automate infrastructure provisioning, management, and scaling for big data cloud environments. Wave simplifies, automates, and optimizes cloud infrastructure for Apache Spark running on Kubernetes.

Spot Elastigroup by NetApp simplifies and automates cloud infrastructure for scale-out applications running in Microsoft Azure, Google Cloud Platform and Amazon AWS, freeing operations teams from infrastructure management burdens. It continuously analyzes resource usage and provides autoscaling groups that optimize compute resources to ensure availability and meet resource demands using the lowest-cost compute options.

NetApp Virtual Desktop Managed Service (VDMS) provides turnkey virtual desktops as a managed service for the expanding enterprise. VDMS integrates a complete Desktop-as-a-Service (DaaS) solution with our data services infrastructure for a simple per-user monthly fee.

Hybrid Cloud Solutions

NetApp Hybrid Cloud Solutions are a portfolio of offerings that deliver on-premises, private cloud, and hybrid cloud services, designed to operate with public cloud data services (e.g., Microsoft Azure, Google Cloud Platform, AWS) through a simplified customer experience.

Our hybrid cloud solutions enable customers to modernize their IT architectures with cloud-connected storage offerings (flash and disk) to free the resources necessary to fund business transformation. Additionally, they help organizations simplify and automate virtualized workloads, accelerate the DevOps journey and build service provider-like infrastructure.

ONTAP is the foundational software underpinning most of NetApp's storage solutions, as well as NetApp’s cloud storage solutions. With ONTAP 9, customers can connect their on-premises NetApp infrastructure to multiple public clouds, creating a Data Fabric. ONTAP 9 provides flexibility to design and deploy a storage environment across the broadest range of architectures - engineered systems, software-defined storage (SDS), and the cloud – while unifying data management across all of them, as well as SAN and NAS environments.

With ONTAP, customers get a comprehensive, industry-leading portfolio of storage efficiency capabilities. Inline data compression, deduplication, and compaction work together to reduce storage costs and maximize the amount of data stored. Customers can multiply savings with space-efficient NetApp Snapshot™ copies, thin provisioning, replication, and cloning technologies.

The hybrid cloud solutions portfolio can be categorized into three solutions areas:

	•	Data Storage – Data storage devices and solutions ensure that customer data remain secure and accessible no matter what type of physical media the data are stored on, or what format, either file, block or object, or a mixture of each.

	•	Data Protection – Data protection is the safeguarding of important information from corruption, compromise, or loss.

	•	Data Management – Data management is the software or operating systems that process the data stored and managed. Data Management includes acquiring, validating, storing, protecting, and processing organizational data to ensure the accessibility, reliability, and timeliness of the data to users and/or processes.

Data Storage

NetApp All-Flash FAS (AFF) series is a scale-out platform built for virtualized environments, combining low-latency performance via flash memory (also known as a solid-state storage disk) with best-in-class data management, built-in efficiencies, integrated data protection, multiprotocol support, and nondisruptive operations; cloud and on-premises. AFF, powered by ONTAP, allows customers to connect to clouds for more data services, data tiering, caching, and disaster recovery. The AFF Series has a portfolio of products designed for multiple markets and price/performance considerations, from smaller channel commercial market offerings to large-scale, global enterprises.

NetApp Fabric Attached Storage (FAS) series are high-volume unstructured, high-capacity data storage devices powered by NetApp ONTAP. NetApp FAS Storage Arrays provide customers with a balance of performance and capacity running either disk drives, hybrid-flash or newer, cost-efficient flash memory known as Quad-level cell (QLC). QLC based systems (FAS500f) are designed for a balanced ratio of capacity and performance. FAS systems cost-effectively deliver data protection, security, and scalability.

NetApp FlexPod is a converged infrastructure solution. It combines servers (compute), storage resources, and the network fabric to create an agile, efficient, and scalable platform for hosting applications. Using Cisco Validated Design methodologies, the FlexPod platform is a portfolio of pre-validated designs used to meet the challenges of simplifying deployments for best-in-class data center architectures based on the Cisco Unified Computing System and NetApp data storage solutions.

NetApp E/EF series is built for dedicated, high-bandwidth applications that need simple, fast SAN storage with enterprise-grade reliability. The E-Series is available as a hybrid-flash platform, while the EF-Series is all-flash. Running on the SANtricity storage operating system, the E/EF-Series storage appliances are designed for performance-sensitive workloads like real-time analytics, HPC, and databases.

NetApp StorageGRID is a software-defined object storage solution for large archives, media repositories, and web data stores. Using the industry-standard object APIs like the Amazon Simple Storage Service (S3), the StorageGRID solution, running on the ElementOS data management storage operating system, is provided both as a NetApp-branded storage solution and as a software-defined solution on third-party hardware.

NetApp SolidFire is a scale-out, all-flash storage platform designed for large-scale infrastructure. It is primarily positioned for private cloud solutions. SolidFire, running on the ElementOS data management storage operating system, allows customers to manage storage performance independent of capabilities and guarantee performance to thousands of applications within a single storage platform.

NetApp HCI, powered by the ElementOS data management storage operating system, allows independent scaling of compute and storage, adapting to workloads with consistent performance. Organizations can consolidate workloads and reduce costs with unified data orchestration and integration across public, private, and on-premises environments.

Data Protection

NetApp SnapCenter Backup Management software is designed to deliver high-performance backup and recovery for database and application workloads hosted on ONTAP storage. This software simplifies backup, restore, and clone lifecycle management with a unified, scalable platform for application-consistent data protection and application-integrated workflows. Leveraging storage-based data management, SnapCenter provides increased performance and availability and reduced testing and development times.

NetApp SnapMirror Data Replication software is a cost-effective, easy-to-use unified replication solution, replicating data at high speeds across the Data Fabric. SnapMirror delivers robust data management capabilities for virtualization, protecting critical data while providing the flexibility to move data between locations and storage tiers, including cloud service providers.

NetApp SnapLock Data Compliance software delivers high-performance disk-based data permanence for HDD and SSD deployments. SnapLock helps provide data integrity and retention, enabling electronic records to be both unalterable and rapidly accessible.

NetApp Data Availability Services simplify the protection and management of NetApp ONTAP data from primary to secondary to cloud S3 storage. Simplified orchestration improves the performance of backup workflows when protecting large numbers of volumes, thereby increasing productivity, reducing cost, and providing rapid time to business insight.

Data Management

NetApp ONTAP Storage Management System is the foundation of NetApp's hybrid cloud and public cloud storage solutions. ONTAP 9 can be deployed on AFF, FAS and/or FlexPod systems. ONTAP 9 provides flexibility to design and deploy a storage environment across the broadest range of architectures - engineered systems, software-defined storage, and the cloud - while unifying data management across all of them, as well as NAS, SAN, and Object environments.

NetApp ElementOS software delivers agility through scale-out flexibility, predictable performance, and automation integrations so organizations can build clouds to accelerate new services. Integrated into the NetApp Data Fabric, ElementOS software enables innovative architectures with flexible scale for our customers' private clouds.

NetApp SANtricity software is the data management software that powers and administers the NetApp E/EF Series storage arrays. SANtricity software offers industry-leading performance, reliability, and ease of use. These capabilities mean that storage administrators can make configuration changes, perform maintenance, and expand storage capacity without disrupting I/O to attached hosts.

NetApp Active IQ Digital Advisor uses artificial intelligence to provide insights, guidance, and actions, so customers can readily improve storage system availability, security, and performance. This predictive analytics and support solution continuously assesses telemetry data, drawing on trillions of real-time and historical diagnostic records and known risk signatures to spot potential problems before they have a business impact. Active IQ can also look across the community to identify trends and suggest ways to enhance infrastructure security and efficiency.

OnCommand Insight enables organizations to simplify operational management of complex private and hybrid cloud and virtual IT environments. Insight is a single solution to enable cross-domain, multi-vendor resource management and analysis across networks, storage, and servers in physical and virtual environments.

OnCommand Workflow Automation (WFA) is a software solution that delivers on the Data Fabric vision. It helps automate storage management tasks, such as provisioning, migration, decommissioning, and cloning storage. WFA enables users to build workflows to complete tasks specified by their processes.

Containers / Kubernetes Solutions

NetApp Astra is a fully managed application-aware data management service built for Kubernetes workloads. Astra allows organizations to protect, recover, and move applications deployed on Kubernetes with no software to download, install, manage, or upgrade.

With Astra, NetApp extends its industry-leading data management services into the Kubernetes ecosystem. Astra helps organizations manage cloud-native applications and legacy workloads with critical capabilities, including data protection, disaster/data recovery with remote backups, simplified application portability, and migration with active clones. Entire applications, along with their data, can be moved from one Kubernetes cluster to another, no matter where the clusters are located.

NetApp Subscriptions and Licensing (Keystone)

NetApp Keystone provides a portfolio of payment solutions and storage-as-a-service offerings for hybrid cloud environments to deliver greater agility, financial flexibility, and reduced financial risk to help companies meet their business outcomes and reduce and or defer payment.

Keystone simplifies the business of hybrid cloud data services. It provides flexible cloud consumption models that simplify how to buy, consume and operate NetApp capabilities.

For IT organizations that want cloud-like experiences in their own data center, NetApp Keystone subscription services offer a public cloud-like experience based on performance tier and storage service type –block, file, or object, available as customer-managed solution or NetApp-managed solution. For IT organizations that want to continue to buy capital infrastructure and capital equipment, Keystone offers a radically simplified experience. Our combination of efficiency, performance and availability guarantees helps IT organizations protect their storage investment.

Professional and Support Services

NetApp and our partners' services teams offer assessment, design, and implementation services that help customers optimize their on-premises, private cloud, hybrid cloud, and/or public cloud IT environments.

NetApp strategic consulting services provide executive-level, high-touch consulting services to help organizations facilitate the alignment of their business and technology goals. Our proven expertise can help organizations define a long-term data fabric strategy and operations model for their enterprise and execute IT initiatives to drive digital transformation.

NetApp's Professional Services team helps organizations mitigate risk and streamline solution design, deployment, migration, and integration—on-premises, in private and hybrid clouds, as well as in the public clouds — to bring the benefits of new technology to their businesses faster. Highly skilled services experts can deliver a secure, optimized environment that provides the consistent, high-quality outcomes one expects from the start.

NetApp Managed Services help optimize performance and efficiency in your hybrid cloud and on-premises environments. These NetApp experts manage the infrastructure using our proven methodology and best practices, freeing the organization's IT staff to focus on enabling the IT transformation required to move the business forward.

The NetApp Global Support organization supplies systems, processes, and people wherever needed to provide continuous operation in complex and critical environments. Our services offer IT organizations the right expertise to envision, deploy, and operate data management solutions, accelerate innovation, and increase lifetime solution value.

Sales, Principal Markets, and Distribution Channels

We market and sell our products and services in numerous countries throughout the world. Our sales efforts are organized around the evolving needs of our customers, and our marketing initiatives reflect this focus. NetApp uses a multichannel distribution strategy. We sell our products, solutions and services to end-user business customers and service providers through a direct sales force and an ecosystem of partners. Our marketing is focused on building our brand reputation, creating market awareness, communicating customer advantages and generating demand for our sales force and channel partners.

Our diversified customer base spans industry segments and vertical markets such as energy, financial services, government, technology, internet, life sciences, healthcare services, manufacturing, media, entertainment, animation, video postproduction and telecommunications. NetApp focuses primarily on the cloud-data services, hybrid cloud, and storage markets. We design our products to meet the needs of our broad customer base – from large enterprises to midsize customers.

Our partnerships with the industry’s leading cloud, infrastructure, consulting, application, and reseller partners are created with one goal in mind: the success of our customers. Global enterprises, local businesses, and government installations look to NetApp and our ecosystem of partners to help maximize the business value of their IT investments.

We work with a wide range of partners for our customers, including technology partners, value-added resellers, system integrators, OEMs, service providers and distributors. During fiscal 2021, sales through our indirect channels represented 77% of our net revenues. Our global partner ecosystem is critical to NetApp’s growth and success. We are continually strengthening existing partnerships and investing in new ones to ensure we are meeting the evolving needs of our customers.

As of April 30, 2021, our worldwide sales and marketing functions consisted of approximately 5,400 managers, sales representatives and technical support personnel. We have field sales offices in approximately 27 countries. Sales to customers Arrow Electronics, Inc. and Tech Data Corporation accounted for 24% and 20% of our net revenues, respectively, in fiscal 2021. Information about sales to and accounts receivables from our major customers, segment disclosures, foreign operations and net sales attributable to our geographic regions is included in Note 16 – Segment, Geographic, and Significant Customer Information of the Notes to Consolidated Financial Statements.

Seasonality

We have historically experienced a sequential decline in revenues in the first quarter of our fiscal year, as the sales organization spends time developing new business after higher close rates in the fourth quarter, and because sales to European customers are typically weaker during the summer months. During the second quarter of our fiscal year, we have historically experienced increased sales, driven by the government sector, concurrent with the end of the U.S. federal government’s fiscal year in September, as well as an increase in business from European markets. We derive a majority of our revenue in any given quarter from customer orders booked in the same quarter. Customer orders and revenues typically follow intra-quarter seasonality patterns weighted toward the back end of the quarter. If recurring services and cloud revenue continues to increase as a percentage of our total revenues, historical seasonal patterns may become less pronounced.

Backlog

We manufacture products based on a combination of specific order requirements and forecasts of our customers’ demand. Orders are generally placed by customers on an as-needed basis. A substantial portion of our products is sold on the basis of standard purchase orders that are cancelable prior to shipment without penalty. In certain circumstances, purchase orders are subject to change with respect to quantity of product or timing of delivery resulting from changes in customer requirements. Our business is characterized by seasonal and intra-quarter variability in demand, as well as short lead times and product delivery schedules. Accordingly, backlog at any given time may not be a meaningful indicator of future revenue.

Manufacturing and Supply Chain

We have outsourced manufacturing operations to third parties located in Memphis, Tennessee; Fremont, California; San Jose, California; San Antonio, Texas; Guadalajara, Mexico; Schiphol Airport, The Netherlands; Komarom and Tiszaujvaros, Hungary; Wuxi and Tianjin, China; Taoyuan City, Taiwan; and Singapore. These operations include materials procurement, commodity management, component engineering, test engineering, manufacturing engineering, product assembly, product assurance, quality control, final test, and global logistics. We rely on a limited number of suppliers for materials, as well as several key subcontractors for the production of certain subassemblies and finished systems. We strive to have multiple suppliers qualified to provide critical components where possible and have our products manufactured in a number of locations to mitigate our supply chain risk. Our strategy has been to develop close relationships with our suppliers, maximizing the exchange of critical information and facilitating the implementation of joint quality programs. We use contract manufacturers for the production of major subassemblies and final system configuration. This manufacturing strategy minimizes capital investments and overhead expenditures while creating flexibility for rapid expansion.

We are certified to the International Organization for Standardization (ISO) 9001:2015 and ISO 14001:2015 certification standards. We have been Tier 2 certified under the U.S. Customs and Border Protection’s (CBP) Customs Trade Partnership Against Terrorism (CTPAT) program since January 2015.

Research and Development

Our research and development team delivers innovation to help customers modernize their IT environment and unlock the best of cloud. Our R&D structure allows us to align and accelerate the execution of our strategies and roadmaps across product groups. We leverage our talent and shared IP for cloud- and hybrid-cloud solutions to remain agile to changing market conditions. Our R&D priorities are to help customers harness the power of public- and multi-cloud solutions, enabling modern data management applications and services, and to enable simple cloud-like experiences on-premises. We design our products and services from the ground up with cloud connectivity in mind, including tiering, disaster recovery, replication, bursting, and migration.

We conduct research and development activities in various locations throughout the world. Total research and development expenses were $881 million, $847 million and $827 million in fiscal 2021, 2020 and 2019, respectively. These costs consist primarily of personnel and related costs incurred to conduct product development activities. Although we develop many of our products internally, we also acquire technology through business combinations or through licensing from third parties when appropriate. We believe that technical leadership is essential to our success, and we expect to continue to commit substantial resources to research and development.

Competition

We operate in an industry in which there are rapid technological advances in hardware, software, and related services offerings. Cloud, digital transformation, and artificial intelligence initiatives are driving changes in customer and solution requirements.

We compete with many companies in the markets we serve. Our hybrid cloud solutions primarily compete with legacy IT and storage vendors. Some offer a broad spectrum of products, solutions and services and others offer a more limited set of storage- and data-management products, solutions or services. Additionally, public cloud providers offer customers storage as an operating expense which competes with more traditional storage offerings that customers acquire through capital expenditures. We both partner with and compete against cloud providers with our public cloud software and services. We rarely see legacy vendors competing in the cloud.

We face ongoing product and price competition in all areas of our business, including from both branded- and generic-product competitors.

Our current and potential competitors may establish cooperative relationships among themselves or with third parties, including some of our partners. It is possible that new competitors or alliances among competitors might emerge and further increase competitive pressures.

We consider our software innovation, cloud integration, and technology partnerships key to our competitive differentiation. We believe our competitive advantage also includes the nature of the relationships we form with our customers and partners worldwide. We strive to deliver an outstanding experience in every interaction we have with our customers and partners through our product, service, and support offerings, which enable us to provide our customers a full range of expertise before, during and after their purchases.

Proprietary Rights

We generally rely on patent, copyright, trademark, trade secret and contract laws to establish and maintain our proprietary rights in our technology, products and services. While our intellectual property rights are important to our success, we believe that our business is not materially dependent on any particular patent, trademark, copyright, license or other individual intellectual property right. We have been granted or own by assignment well over two thousand U.S. patents, hundreds of pending U.S. patent applications, and many corresponding patents and patent applications in other countries. From time to time, we may make certain intellectual property available under an open source license. Our primary trademarks are NetApp and the NetApp design logo, which are registered trademarks in the U.S. and in many other countries. In addition, we have trademarks and trademark registrations in the U.S. and other countries covering our various product or service names.

We generally enter into confidentiality agreements with our employees, resellers, distributors, customers, and suppliers. In addition, through various licensing arrangements, we receive certain rights to the intellectual property of others. We expect to maintain current licensing arrangements and to secure additional licensing arrangements in the future, as needed and to the extent available on reasonable terms and conditions, to support continued development and sales of our products and services. Some of these licensing arrangements require or may require royalty payments and other licensing fees. The amount of these payments and fees may depend on various factors, including but not limited to the structure of royalty payments; offsetting considerations, if any; and the degree of use of the licensed technology.

The industry in which we compete is characterized by rapidly changing technology, a large number of patents, and frequent claims and related litigation regarding intellectual property rights, and we may be exposed to various risks related to such claims or legal proceedings. If we are unable to protect our intellectual property, we may be subject to increased competition that could materially and adversely affect our business operations, financial condition, results of operations and/or cash flows.

Environmental Disclosure

We are committed to the success of our customers and partners, to delivering value to our stockholders, and to positively affecting the communities where our employees work and live. We firmly believe that we can accomplish these objectives concurrently with our commitment to sustainability. We are committed to the prevention of pollution; efficient use of natural resources; and minimizing, relative to the growth of the company, the environmental impacts from our operations, products, and services, as well as complying with laws and regulations related to these areas. Our environmental management system provides the framework for setting, monitoring, and continuously improving our environmental goals and objectives.

We are voluntarily measuring, monitoring, and publicly reporting our scope 1 and scope 2 greenhouse gas emissions and participate in the CDP, which is a global standardized mechanism by which companies report their greenhouse gas emissions to customers and institutional investors. We promote alternative transportation programs through education and awareness campaigns, and we continuously seek to optimize the energy efficiency of our buildings, labs, and data centers. At both the global and regional/state levels, various laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. Environmental laws are complex, change frequently, and have tended to become more stringent over time. However, it is often difficult to anticipate future regulations pertaining to environmental matters and to estimate

their impacts on our operations. Based on current information, we believe that our primary risk related to climate change is the risk of increased energy costs. We are not currently subject to a cap-and-trade system or any other mitigation measures that could be material to our operations, nor are we aware of any such measures that will impact us in the near future. Additionally, we have implemented disaster recovery and business resiliency measures to mitigate the physical risks our facilities, business, and supply chain might face as a consequence of severe weather/climate-related phenomena such as earthquakes, floods, droughts, and other such natural occurrences.

We are also subject to other federal, state, and local regulations regarding workplace safety and protection of the environment. Various international, federal, state, and local provisions regulate the use and discharge of certain hazardous materials used in the manufacture of our products. Failure to comply with environmental regulations in the future could cause us to incur substantial costs or subject us to business interruptions. We believe we are substantially compliant with all applicable environmental laws. All of our products meet the requirements of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH); Waste Electrical and Electronic Equipment (WEEE); Restriction of Hazardous Substances (RoHS); and China RoHS directives. We have maintained an environmental management system since December 2004. As part of ISO 14001 requirements, we set local environmental performance goals such as reducing energy use per square foot and minimizing waste generated on site, that are aligned with our overall corporate strategy. We also conduct periodic reviews and are subject to third-party audits of our operations, and we monitor environmental legislation and requirements to help make sure we are taking necessary measures to remain in compliance with applicable laws, not only in our operations but also for our products.

Human Capital Management

We take pride in attracting and retaining leading talent in the industry based on a culture-fit approach. From our inception, NetApp has worked to build a model company and has embraced a culture of openness and trust. At NetApp, our employees are supported and encouraged to be innovative, and we communicate openly and transparently so that employees can focus on critical and impactful work that ties directly to our business strategy. We continue to invest in our global workforce to support diversity and inclusion and to support our employees’ well-being and development.

Diversity, Inclusion and Belonging

We believe diversity, inclusion and belonging leads to more innovation, better access to talent and improved business outcomes. Our strategies are intended to increase the demographic and cognitive diversity of our employee population, promote a culture of inclusion and to leverage such diversity to achieve business results. For more information about our commitment to diversity, inclusion and belonging, go to the “Diversity Inclusion and Belonging” section of our website.

Compensation, Benefits and Wellbeing

Our healthcare options offer competitive, comprehensive coverage for our employees and their families, including:

	•	National medical plans,

	•	Regional medical plans,

	•	Expert advice from world-renowned doctors through our medical second opinion program,

	•	National dental plans,

	•	National vision plans with two levels of coverage to choose from and a

	•	Robust wellness program.

Insurance and income protection. We provide life, accidental death and dismemberment and disability insurance programs. For additional peace of mind, we also offer supplemental insurance for our employees and their dependents.

Financial and savings programs. We offer flexible spending accounts, an employee stock purchase plan and a competitive 401(k) retirement plan with a company match. Our 401(k) plan gives employees more options to maximize retirement savings with pre-tax, Roth and after-tax contributions. We help our employees prepare for retirement by capitalizing on their total compensation and helping them save.

Employee Wellbeing. We provide a wide range of wellbeing programs and tools to ensure employees and their families have the resources they need when they need them. We offer emotional wellbeing resources and programs such as back-up child and elder care, student debt repayment, educational assistance, and legal services for employees and their dependents. NetApp also offers a variety of time-off programs to help support our employees who need time-off. Employees also have access to discounts and fitness centers.

Giving Back. The NetApp Serves Program supports how our employees want to make a difference in the world. In 2019, more than 2,800 NetApp employees donated over 64,000 hours to serve their communities and make an impact around the world. The NetApp Serves program encourages employees to volunteer through individual, team or company efforts.

COVID-19

At NetApp, the health and safety of our employees, customers, and partners is our number one priority. Like all businesses, we have been closely monitoring the COVID-19 outbreak. We are following guidance from the U.S. Centers for Disease Control (CDC), the World Health Organization (WHO), and international and local health authorities in countries where we operate. Our goal is to reduce the risk that anyone at NetApp might contract or inadvertently spread the virus. We have taken the following proactive steps to help protect ourselves and others and minimize the spread of COVID-19:

	•	Implemented work-from-home for the majority of locations in accordance with guidance from the CDC, WHO and local government and health authorities.

	•	Established a travel freeze to or from high-risk countries.

	•	Restricted all travel to business-critical activities with enhanced notification and approval requirements.

	•	Restricted access to NetApp facilities, including for employees and social and familial visitors.

	•	Optimized all internal meetings for remote participation.

	•	Met with customers, partners and other key stakeholders virtually in high-risk areas.

We continue to monitor the situation closely and may revise these measures or implement further measures in coordination with best practices and updated guidance from the relevant authorities.

Employees

As of April 30, 2021, we had approximately 11,000 employees worldwide. None of our employees are represented by a labor union and we consider relations with our employees to be good.

Please visit our website for more detailed information regarding our human capital programs and initiatives. Nothing on our website shall be deemed incorporated by reference into this Annual Report on Form 10-K.

Information About Our Executive Officers

Our executive officers and their ages as of June 10, 2021, were as follows:

Name	Age	Position
George Kurian	54	Chief Executive Officer
César Cernuda	49	President
Michael Berry	58	Executive Vice President and Chief Financial Officer
Brad Anderson	62	Executive Vice President, Hybrid Cloud Group
Matthew K. Fawcett	53	Executive Vice President, Chief Strategy and Legal Officer, and Secretary

George Kurian was appointed chief executive officer on June 1, 2015. He joined our board of directors in June 2015. From September 2013 to May 2015, he was executive vice president of product operations, overseeing all aspects of technology strategy, product and solutions development across our product portfolio. Mr. Kurian joined NetApp in April 2011 as the senior vice president of the storage solutions group and was appointed to senior vice president of the Data ONTAP group in December 2011. Prior to NetApp, from 2002 to 2011, Mr. Kurian held several positions at Cisco Systems, including most recently vice president and general manager of the application networking and switching technology group. From 1999 to 2002, Mr. Kurian was the vice president of product management and strategy at Akamai Technologies. Prior to that, he was a management consultant with McKinsey and Company, and led software engineering and product management teams at Oracle Corporation. Mr. Kurian is a board member at Cigna Corporation, a global health services company. Mr. Kurian holds a BS degree in electrical engineering from Princeton University and an MBA degree from Stanford University.

César Cernuda joined NetApp in July 2020 as president and is responsible for leading the company’s global go-to-market organization spanning sales, marketing, services, support, and customer success. Before joining NetApp, Mr. Cernuda held various leadership positions in sales, marketing, and product development. He has more than 20 years of international experience, launching

and growing businesses in major markets around the world. He worked at Microsoft for 23 years in senior roles, including vice president of worldwide sales and marketing for Microsoft Dynamics, president of the Microsoft Asia-Pacific region, and most recently president of the company’s Latin America and Caribbean theater and corporate vice president worldwide. Mr. Cernuda is a graduate of the Harvard Business School Executive Leadership Program and the Program for Management Development at IESE Business School – University of Navarra. He earned his Bachelor of Business Administration from ESIC Business & Marketing School.

Michael J. Berry joined NetApp in March 2020 as executive vice president and chief financial officer, overseeing the worldwide finance, investor relations, workplace resources and IT organizations. Mr. Berry has served as a chief financial officer for 16 years in both public and private companies including McAfee, FireEye, Informatica, and SolarWinds. Most recently he was executive vice president and chief financial officer at McAfee where he was responsible for all aspects of finance, including financial planning, accounting, tax and treasury, as well as operations and shared services. Mr. Berry is a board member of Rapid7 and FinancialForce, holding the chair of the audit committee position at each company. Mr. Berry holds a BS degree in finance from Augsburg University and an MBA degree in finance from the University of St. Thomas.

Brad Anderson joined NetApp in January 2018 and is the executive vice president and general manager (GM) of the hybrid cloud group, with responsibility for driving the strategy and development of NetApp’s hybrid cloud solutions portfolio. Prior to NetApp Mr. Anderson spent nine years as senior vice president and GM of HP Compaq’s servers business and seven years as president and GM of Dell's enterprise solution group. Immediately prior to joining NetApp, Mr. Anderson served as president and chief operating officer of Gravitant, a cloud service brokerage platform company. Mr. Anderson holds a BS degree in petroleum engineering from Texas A&M University and an MBA degree from Harvard Business School.

Matthew K. Fawcett joined NetApp in September 2010. As executive vice president, chief strategy and legal officer, Mr. Fawcett is responsible for leading our corporate strategy, corporate development, government relations and legal affairs worldwide. Prior to joining NetApp, from 1999 to August 2010, Mr. Fawcett served in various positions at JDS Uniphase Corporation, an optical components company, including as senior vice president, general counsel, and corporate secretary. Prior to joining JDSU, Mr. Fawcett was counsel at Fujitsu and worked in private practice at Morrison & Foerster LLP. Mr. Fawcett serves on the board of the Law Foundation of Silicon Valley and on various advisory boards. Mr. Fawcett holds a BA degree from the University of California at Berkeley and a JD degree from the University of California at Los Angeles.

Additional Information

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